San Francisco Music Box changes tune

Just about everything is new at San Francisco Music Box Co. — new owners, a new president and even a new store prototype — all part of a strategy to reclaim its position as “the defining musical giftware choice.”

“We're trying to take it back to what the founders first envisioned,” says Curt Gray, the former COO of specialty grocery chain Dean & Deluca and vice president of operations for Barnes & Noble, who was appointed president and CEO of SFMB in January. “Over time, the stores became very promotional with low-end merchandise. We're looking for a best-of-class, highly edited format.”

While promotions were favored by previous owner Foot Locker Inc., the chain's new owner, New York-based Kier Group Holdings LLC, is targeting a more upscale clientele.

Headquartered in Walnut Creek, Calif., SFMB was founded in 1978 with a single store on San Francisco's Pier 39. It has grown to 162 year-round and 172 seasonal outlets, though 85% of revenue comes from catalog sales, direct marketing and wholesaling.

According to Gray, the company plans to close underperforming stores while opening new ones in existing markets. In September it introduced its first redesigned store at San Francisco Shopping Center and its first new outlet in St. Louis. Gradually, all stores, which currently average 1,100 sq. ft., will be refitted.

Though music boxes constitute the bulk of the retailer's business, Gray has been touring the world in search of unique products, such as replicas of Venetian papier mache masks by an Italian art history professor and musical puppets by a Canadian artist. Jewelry has also been added to the merchandise mix.

Where as existing SFMB stores focus on single items, the new prototype will be category oriented. Gray says one of the company's biggest successes has been Cicely Mary Barker's Flower Fairy line, which includes figurines along with books, snow globes, tea sets and similar products.

Other changes include institution of a customer loyalty program, trunk shows and celebrity appearances. Emphasis will be shifted from the 55+ age group to the 25- to 55-year-old age group. Gray says approximately 85% of the product mix will be new by next year.

“We're keeping tried and true lines but adding super unique new ones,” he adds. “We're looking for the ‘Oh wow, this is really cool’ response.”